Tag Archives: seed-to-sale

On February 8th, Peter Antolin, the deputy director for the Washington State Liquor and Cannabis Board (WSLCB), sent an email to licensees explaining why the transition to their new traceability system was disrupted. Last Saturday, someone gained access to the sensitive information in Leaf Data Systems, the state’s traceability software that is powered by MJ Freeway.

“A computer vulnerability was exploited on Saturday, allowing unauthorized access to the traceability system,” Antolin told licensees in the email. “There are indications an intruder downloaded a copy of the traceability database and took action that caused issues with inventory transfers for some users. We believe this was the root cause of the transfer/manifest issue experienced between Saturday and Monday.”

The email goes on to say that no personally identifiable information was available to the ‘intruder,’ but some sensitive information was clearly accessed. That data includes route information of manifests filed between February 1st and 4th as well as transporter vehicle information including VIN, license plate number and vehicle type, according to the email.

That email leaves much to be desired. For one, they do not exactly have a solution, instead trying to alleviate licensees’ worries with a hollow inanity full of meaningless jargon: “The WSLCB and MJ Freeway continue to implement several strategies to prevent future vulnerabilities to future intrusions,” reads the email. “This includes full logging and monitoring and working with third-party entities. Since this remains an active investigation, details on security are not publicly available.” However, today the WSLCB is hosting a webinar where Peter Antolin, their IT division, the MJ Examiners unit and enforcement will be available to answer questions, according to the email.

This is by no means the first security breach that Washington and MJ Freeway have suffered. In May of 2017, Washington originally selected Franwell’s METRC as the contract partner for their traceability software system. Less than a month later in June of 2017, after a mistake in the selection process, Washington selected MJ Freeway instead of Franwell for the traceability contract. Three days later, MJ Freeway’s source code was stolen and published online. Then in September, Nevada cancelled their contract with MJ Freeway after a security breach, their services crashed in Pennsylvania and Spain, and in October it became clear that the company could not meet the October 31 deadline for their new Washington contract.

In November of 2017, BioTrackTHC, the company that held the previous contract for Washington’s traceability software, helped the state through the transition period with a temporary Band-Aid solution to hold the state over until January of 2018. A month after they expected to implement the new MJ Freeway system, the latest security breach occurred this week and disrupting the rollout yet again.

At the end of the email Antolin sent to licensees yesterday, he says there will continue to be attempts to breach the system’s security. “The bottom line is that this incident is unfortunate,” says Antolin. “There will continue to be malicious cyberattacks on the system. This is true of any public or private system and is especially true of the traceability system.” This begs a few questions: why aren’t we hearing about this kind of security breach in other states’ traceability systems? What are other companies doing that prevents this from happening? Why does this keep happening to MJ Freeway?

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According to a press release published this morning, BioTrackTHC successfully implemented their Universal Cannabis System (UCS) in Washington State, a temporary solution for the state’s seed-to-sale cannabis tracking system, while the new system is yet to be deployed.

BioTrackTHC had a contract with Washington State for four years, which expired just weeks ago at the beginning of November. Back in June, after a few minor hiccups, the state announced that MJ Freeway would be the successive software platform used for the state’s seed-to-sale traceability system.

The deadline for the new software to be ready for deployment was set for November 1st, when the BioTrackTHC contract would expire and the MJ Freeway contract would begin. Between when the contract was awarded and the deadline for implementation, MJ Freeway made headlines for a series of security hacks and systems failures. Subsequently, MJ Freeway said they could not deliver the software platform until January of 2018, leaving a two-month gap where businesses have no state-mandated software to use for the tracking system.

The contingency plan that the state laid out consisted of business owners manually inputting data in excel spreadsheets. When first pressed for a Band-Aid solution, representatives of BioTrackTHC cited security concerns related to MJ Freeway’s hacks as reason for being hesitant to extend their contract through the interim period.

In an open letter to the Washington cannabis industry back in October before the end of their contract, Patrick Vo, president and chief executive officer of BioTrackTHC, laid out an explanation for what went wrong and provided an alternative solution, essentially a private sector version of their government-mandated traceability software system.

The open letter to the Washington cannabis industry, written by Patrick Vo

Announced this morning, the new system, UCS, is being used by over 1,600 of the 1,700 cannabis licensees in Washington. The UCS has so far submitted 39,000 individual excel spreadsheets to the Washington State Liquor and Cannabis Board (WSLCB). “After the WSLCB announced that their replacement system would not be ready in time and that the only other option was for all 1,700 licensees to submit their seed-to-sale data via manual spreadsheets, BioTrackTHC created the UCS—a privatized clone of the government system—within a few days and deployed it minutes after the termination of the old system to minimize the impact on all licensees,” reads the press release.

The UCS allows business owners to streamline data recording, instead of manually entering information into spreadsheets. It is also integrating with 3rd party software competitors such as WeedTraQR, GrowFlow, Mr. Kraken, TraceWeed, GreenBits, S2Solutions and DopePlow. “After the WSLCB’s announcement, we knew that we had only a few days to provide a universal system to which the whole industry could submit compliance data and enable communication across the supply chain between licensees and their seed-to-sale system,” says Vo. “Our priority was to ensure that licensees could continue to operate in the absence of a government seed-to-sale system. Not having that system in place could have left Washington licensees vulnerable to noncompliance in a variety of ways, not to mention the potentially crippling volume of extra work needed to manually track a business’ entire inventory.”

Washington State’s new traceability software system by MJ Freeway is expected to deploy in January of 2018.

KIND Financial, a technology and compliance software solutions provider in the cannabis industry, is launching a new e-commerce and payment processing platform in Canada. According to the press release, they are partnering with a Canadian bank to launch the KIND Seed to Payment platform, which is essentially an e-commerce gateway integrated with their compliance software, KIND’s RegTech platform.

David Dinenberg, founder and CEO of KIND Financial

David Dinenberg, founder and CEO of KIND Financial, says this is an approach to help alleviate the cannabis industry’s banking woes. “We’ve been very focused on a global vision and taking a strategic approach towards solving the cannabis industry’s largest problem – banking,” says Dinenberg. “Not only have we built a broad portfolio of finance and compliance solutions with a high-level of technical sophistication, but we’ve made a strong commitment to security and compliance, which is evident through our partnership with Microsoft.” A little over a year ago, they entered a partnership with Microsoft to utilize their cloud-based solutions for government traceability software.

According to the press release, the software has regulatory and security features built in, such as age and identity verification, which can help companies comply with security and chain of custody regulations. “Our mission is to ensure business and technological growth for all constituencies within the cannabis industry while ensuring full compliance with evolving regulations, and that’s why we’re thrilled to make these services available to our great neighbors in the north,” says Dinenberg. “We understand compliance will be a critical issue for some time to come, but with our solution, all providers and their partners can focus on the job at hand while keeping in line with regulatory mandates.”

KIND Financial has not done much work in Canada previously, but this could be a sign of a greater push for international expansion. “We’re excited to be working in a new country to boost the Canadian cannabis industry in a safe and regulated manner, and we look forward to expanding into other markets overseas,” says Dinenberg. The press release says the new platform is designed to work with different languages and foreign currencies, including the euro and Australian dollar, which could help Canadian producers enter emerging markets.

In addition to their announcement of the KIND Seed to Payment platform, the company also announced they will be rolling out a mobile payment system called KIND Pay, a digital payment option for consumers that will accept Visa and MasterCard. They anticipate that KIND Pay will launch before the end of this year.

MJ Freeway, a seed-to-sale traceability software company with a number of government contracts, has been making headlines this year for all the wrong reasons. A series of security breaches, website crashes and implementation delays have beleaguered the software company throughout 2017.

Just this morning, the Philadelphia Inquirer reported the company’s services crashed Saturday night and Monday afternoon. That article also mentions an anonymous hacker tried to sell sensitive information from the Washington and Nevada hacks in September. Back in April, when Pennsylvania awarded the state’s contract to MJ Freeway for its tracking system, Amy Poinsett, co-founder and chief executive officer of MJ Freeway told reporters “I think I can confidently say we are the most secure cannabis company in this particular industry.” It is safe to say this is now being called into question.

According to an email we obtained, all of MJFreeway’s clients in Spain experienced an online outage, but that services were restored within 24 hours. In an email sent to clients in Spain, the company told customers that the problems were the result of a system failure. “Our initial analysis indicates that this was a system failure and unfortunately none of the data was able to be successfully retrieved from the backup archive due to an error but we can assure you that none of your data was extracted or viewed at any moment,” reads the email. “We are extremely distressed regarding the event that occurred with the system and the service interruption that occurred yesterday. We recognize that this is a situation that is very serious and negatively impacts your club.” The email says that MJ Freeway is addressing those problems in a few ways, one of which being ongoing audits of their data backups. “The event has led us to reconstruct our “hosting environment” in Europe to use the latest technology from Amazon Web Services with the best redundancy, flexibility and security, using the highest stability measures in the AWS environment,” reads the email. While the site will be restored fully, according the email, historical data is lost. The company is working with their clients to help them get data back into the system.

Two weeks ago, we reported on the State of Washington choosing Franwell as their apparent successful vendor (ASV) for their seed-to-sale traceability system contract. Late last week, the Washington State Liquor and Cannabis Board (WSLCB) sent out an email explaining that they are no longer going with Franwell and the new ASV is MJ Freeway.

The email (left) consisted of a letter sent by Peter Antolin, Deputy Director of the WSLCB, to licensees “who had written to the Board and staff regarding the marijuana traceability Apparent Successful Vendor and RFID tags.” Apparently, the reason behind switching the ASV to MJ Freeway is because Franwell’s system requires only one method for tagging plants- RFID tags. According to the letter, Deputy Director Antolin says the initial request for proposal (RFP) stated that the traceability system needs to support a variety of tagging methods, including bar codes and RFID. “The RFP requirements did not allow a vendor to make any assumptions regarding use of a single tagging methodology or allow vendors to include any such costs affecting the state or our licensees in their proposal,” says Antolin. As they made clear in the previous press release, the ASV is not the official contract winner until they complete negotiations and sign the contract.

On June 7th, Franwell withdrew their proposal for the state’s traceability system, thus Washington went with the second highest scoring vendor, MJ Freeway. Deputy Director Antolin says they submitted a strong bid, but there are still many questions left unanswered. How could such a glaring mistake be overlooked when the state named Franwell the highest scoring bidder? Is MJ Freeway’s system robust enough and capable of handling the state’s cannabis licensees’ traceability requirements even though they were not the highest scoring bidder? The deadline for the new system to be in place is October 31, 2017, which is quickly approaching for such a massive systems overhaul.

The WSLCB’s oversight highlights a few inadequacies with the state’s regulatory agency, particularly their indecision and lack of foresight. So much of the concept behind seed-to-sale traceability rests on Cole Memo compliance. A big reason why some states seek to implement a robust tracking system is to remain compliant with the Cole Memo; preventing diversion to crime organizations with regulatory oversight is a key tool that states use to tell the federal government they are complying with their directive and intend to protect their state’s legal cannabis operations from federal prosecution. Without a proper system in place, the state runs the risk of exposing their entire cannabis market to threats of federal enforcement, a scenario that seems unlikely but could be disastrous to cannabis businesses and the local economy.

The Washington State Liquor and Cannabis Board (WSLCB) announced today they plan to choose Franwell as their technology partner for the state’s cannabis seed-to-sale traceability system. While the release states they have not yet officially awarded them the contract, it says Franwell is the apparent successful vendor (ASV) to replace their current system. “An ASV is the procurement term used for the highest scoring, responsive vendor,” says the press release.

Rick Garza, director of the WSLCB, says they plan on making a number of changes that they couldn’t under their current contract. “Over the last four years we have learned a lot about this industry, including aspects to the industry that were unknown when the current traceability system was implemented,” says Garza. “We need a system that will grow and flex with Washington’s maturing marijuana system.”

Seven companies submitted bids for the new contract and the agency narrowed that down to three finalists, each of which gave presentations and demonstrations on their software products to WSLCB staff last week. They also worked with folks in the cannabis industry, selected by trade organizations, that provided input on the requests for proposal. Those industry stakeholders that participated with input will get a demonstration of the new software system in early June.

They plan on transitioning to the new system no later than October 31, 2017. Franwell’s METRC product is currently used in Colorado, Oregon and Alaska.

According to a press release, the State of Delaware has chosen BioTrackTHC as their partner in seed-to-sale tracking software. Delaware’s Department of Health and Social Services (DHSS) signed a contract with BioTrackTHC for the tracking and patient registry software.

In 2016, Delaware issued a request for proposals for “the Delaware Enterprise Consolidated Cannabis Control System,” which encompasses the statewide patient registry and seed-to-sale traceability systems. “Our sincerest thanks to DHSS for choosing Team BioTrack,” says Patrick Vo, CEO of BioTrackTHC. “DHSS has been wonderful to work with throughout the contracting process, and we look forward to partnering with them to provide the tools and data they need to continue overseeing the industry and protecting their patients.” BioTrack’s software was selected as the winner of a number of government contracts in other states previously for the same role.

Their software is currently used in government traceability systems in Washington, New Mexico, Illinois, Hawaii, New York and the city of Arcata, California. The press release states regulators will have the ability to view the retail data “including plant counts and usable inventory, lab results, transportation, and point-of-sale data—to perform periodic audits and ensure compliance.” The patient registry will also provide better patient accessibility through the new software with a faster turn around time and automated application processing.

BioTrackTHC provides technology solutions for businesses and governments to tracking products throughout the supply chain to the point of sale. The software systems help businesses remain compliant with regulations and monitor data for things like inventory management.

In a memo sent throughout the Department of Justice on April 5th, attorney general Jeff Sessions outlines the establishment of the Department’s Task Force on Crime Reduction and Public Safety. That task force, largely focused on violent crime, is supposed to find ways that federal prosecutors can more effectively reduce illegal immigration, violent crimes and gun violence.

The task force is made up of subcommittees, according to the memo, and one of them is focused on reviewing federal cannabis policy. “Task Force subcommittees will also undertake a review of existing policies in the areas of charging, sentencing, and marijuana to ensure consistency with the Department’s overall strategy on reducing violent crime and with Administration goals and priorities,” the memo reads. “Another subcommittee will explore our use of asset forfeiture and make recommendations on any improvements needed to legal authorities, policies, and training to most effectively attack the financial infrastructure of criminal organizations.” Those existing policies that Sessions refers to in the memo could very well be the 2013 Cole Memorandum, an Obama administration decree that essentially set up a framework for states with legal cannabis laws to avoid federal enforcement of the Controlled Substances Act.

In the past, Sessions has said he thinks the Cole Memo is valid, but remains skeptical of medical cannabis. In the last several months, comments made by Sessions and White House press secretary Sean Spicer have sparked outrage and growing fears among stakeholders in the cannabis industry, including major business players and state lawmakers. As a general feeling of uncertainty surrounding federal cannabis policy grows, many are looking for a safe haven, which could mean looking to markets outside of the U.S., like Canada, for example.

Sen. Jeff Sessions (R-AL)Photo: Gage Skidmore, Flickr

Washington State’s former Attorney General Rob McKenna, Washington State’s former Chief Deputy Attorney General Brian Moran, and Maryland’s former Chief Deputy Attorney General Kay Winfree recently went on the record identifying the BioTrack THC traceability system as fully compliant with the Cole Memo. “The key to meeting the requirements of the Cole Memorandum is ‘both the existence of a strong and effective state regulatory system, and an operation’s compliance with that system’,” says the former attorney general and chief deputy attorneys general in a press release. “As described above, Washington State has a robust, comprehensive regulatory scheme that controls the entire marijuana supply chain.

The email sent to Colorado prosecutor Michael Melito

The flagship component of this regulatory scheme is the WSLCB’s seed to sale inventory system, the BioTrackTHC Traceability System.” Those commendations from a former attorney general could provide some solace to business operating with the seed-to-sale traceability software.

Still though, worries in the industry are fueled by speculation and a general lack of clarity from the Trump Administration and the Department of Justice. In an email obtained by an open records request and first reported by the International Business Times, a DEA supervisor asked a Colorado prosecutor in the state attorney general’s office about a number of cannabis-related prosecutions. The DEA supervisor asked for the state docket numbers of a handful of cases, including one involving cannabis being shipped out of state, according to The Denver Post. “Some of our intel people are trying to track down info regarding some of DEA’s better marijuana investigations for the new administration,” reads the email. “Hopefully it will lead to some positive changes.” So far, only speculations have emerged pertaining to its significance or lack thereof and what this could possibly mean for the future of federal cannabis policy.

BioTrackTHC, partnering with the Hawaii Department of Health, is deploying the first live seed-to-sale traceability system for cannabis in a FedRAMP-authorized environment, according to a press release. The Federal Risk and Authorization Management Program (FedRAMP) is a government-wide risk management platform that provides standards for security assessment, authorization and continuous monitoring for cloud products and services. “BioTrackTHC, utilizing Amazon Web Service’s Government Cloud (AWS GovCloud), has met all necessary requirements to host its live government cannabis seed-to-sale Traceability Systems in one of the most secure cloud platforms in the world,” states the press release.

“The BioTrackTHC team invested an incredible amount of time and effort into this high priority project, and we are excited to see it transform from last year’s concept to clean execution,” says Patrick Vo, president and chief executive officer of BioTrackTHC. “We are grateful for the Hawaii Department of Health’s trust in us to get it right the first time.” Hawaii working with BioTrackTHC and AWS GovCloud essentially affords them an ultra-high level of data security in their state traceability program.

“We’re pleased to know that our state’s seed-to-sale Traceability System is now housed in the most secure cloud server available,” says Keith Ridley, chief of the Hawaii DOH Office of Health Care Assurance. “This ensures safety and comfort for our licensees, business operators, and our patients, who can all be confident in knowing their business data and protected patient information is being stored in the most secure traceability system in the world.” The FedRAMP decision-making body is comprised of the Chief Information Officers (CIOs) from the Department of Defense, Department of Homeland Security, and the General Services Administration, with additional collaboration from the National Institute of Standards and Technology, National Security Agency, Office of Management and Budget, and the Federal CIO Council.

The FedRAMP standards include “400 security measures and allows government agencies to use these and only these cloud environments for high-impact data where the loss of data confidentiality, integrity, or availability could be expected to have a severe or catastrophic effect on organizational operations, assets, or individuals,” according to the press release. Essentially this means that they meet the highest security requirements of the program.

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